Mar

Crowdfund launches! Let’s go!

Eve Dmochowska Category

I have been thinking, dreaming and scheming up this idea for months, and I have finally co-ordinated my life well enough to make this a core project for the next 12 months.

The Crowdfund concept is simple:

Pool the money of 1000 South Africans who invest R1,000 each towards a R1 million angel fund to help online start-ups get off the ground.

There is hardly any decent angel investment network, or even an angel investment culture, in South Africa. That has had devastating consequences the local online industry, and we are paying the price by not launching many (hardly any?) online applications with global appeal.

An angel network is crucial, because it provides the capital to startups to develop ideas into prototypes. Those ideas can then be taken to a more formal investment vehicle, like a venture capitalist, who is eager to invest more money, but only toward a proven concept.

The logic goes like this: Out of 10 companies in which a Venture Capitalist (VC) will invest, about six will fail. Two or three might break even. And one or two will be hugely successful, and will make the entire investment in the ten companies worthwhile. Problem is: you really do need to hedge your bets. Which is difficult to do, if there are no startups to choose from.

The Crowdfund aims to fix that. Not only do we want to change the investment mindset of an angel investor, but we want to encourage the development of good, solid, viable and huge-potential ideas, that can then be launched on the global scene with the help of local or international VCs.

It won’t happen if you don’t get involved. We need a crowd to make the Crowdfund work!

If you are intersted to find out more, please visit the website www.Crowdfunding.co.za .

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